Burt Company purchased common stock in RR Company for $500,000.In the current year,RR Company reported net income of $48,000 and paid a dividend of $32,000.At the end of the year,the market value of the investment in RR Company was $525,000.
Required:
A)Assume Burt Company owns 10% of the shares of RR Company.Burt Company considers the investment to be available-for-sale securities.Show the effects of the transactions above on the accounts of Burt Company using the balance sheet equation.
B)Assume Burt Company owns 25% of the shares of RR Company.Show the effects of the transactions above on the accounts of Burt Company using the balance sheet equation.

Question

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The Answer of Burt Company purchased common stock in RR Company for $500,000.In the current year,RR Company reported net income of $48,000 and paid a dividend of $32,000.At the end of the year,the market value of the investment in RR Company was $525,000.
Required:
A)Assume Burt Company owns 10% of the shares of RR Company.Burt Company considers the investment to be available-for-sale securities.Show the effects of the transactions above on the accounts of Burt Company using the balance sheet equation.
B)Assume Burt Company owns 25% of the shares of RR Company.Show the effects of the transactions above on the accounts of Burt Company using the balance sheet equation.

Burt Company Purchased Common Stock in RR Company for $500,000